Peter Myers' Blog

Gray Areas

Getting involved in elder law can be perilous. 

I have finally concluded a case made my blood curdle.  You think you are doing the right thing, and then, blam!  Proving once again that no good deed goes unpunished.

It all started last June.  I represented an Italian nephew (he happened to be a professor) that was appointed a successor co-trustee of his Great-Aunt's trust.  Great Aunt - San Mateo; Nephew - Roma.  What fool set up that estate plan, you ask?  Let's just call him the successor co-trustee (!) and the Great Aunt's own lawyer.  Yup, Mr. Elmer Fool, Esq. 

Little did I know that I would get hauled into a problem where Elmer was trying to have his own client, the Great Aunt, declared incapacitated so he could take over as co-trustee.  Nephew did not want to go along with the plan.  So Baker & McKenzie figures 'Myers can handle it,' so they refer it to me.  How is it that these iron filings constantly end up stuck to my sympathy magnet?  Since the nephew lived in Rome, I'm blaming the Pope.

Step #1:  attend the hearing.  There's Elmer, arguing a private professional Trueheart should step in.  Normally a good idea, but Elmer won't relinquish his role as successor co-trustee or as lawyer for the Great Aunt, taking the position she is incapacitated, and no other lawyer is allowed to meet with her to defend her, because - after all - she is a represented party.  So Elmer and Trueheart are appointed temporary co-trustees.  I convince the Court to allow me to meet Great Aunt, and Court insists the Court Investigator be present and "run the meeting."  Fine, cool.

Court Investigator and I meet with Great Aunt.  She seems fine, with it, understands the proceedings, wants lawyer out of her life and wants my client in.  Doesn't know private fiduciary from Adam, doesn't want her in her life.  Meeting concludes, hopefully Investigator will get the report in and all will be righted.

Investigator goes on vacation.  No report filed.  Great Aunt starts calling me.  Great Aunt has Nephew call me, and then has neighbor call me: "please come over.  I need to speak with you."  I explain to nephew and neighbor we need an independent lawyer, not me, to meet with her to avoid appearance of conflict of interest.  All agree, and I am to show up on a weekend day (since I am busy during the week) with independent lawyer to meet with Great Aunt.

I check the WealthCounsel directory, find a lawyer a few miles away, and beg her to meet me at the house on a Saturday.  She agrees.  Perhaps the world will be righted and everyone can have their own lawyer again. 

Nothing remarkable about the meeting - she meets, I use the opportunity to interview the neighbor and the caregiver.  Before I leave, I chat with the Great Aunt for minute, with the lawyer present, and all is well.

Elmer has a secret grapevine to the home.  Caregiver is in Elmer's pocket.  She calls Elmer, who then proceeds into court with finger waving, accusing me of all manner of ill will.  Magically, Great Aunt is drugged the afternoon of the hearing (alleged UTI) and cannot attend.  Judge Impetuous decides I have "crossed the line" and "engaged in elder abuse" by trying to get Great Aunt her own lawyer.  Elmer demands an apology from me, and Great Aunt's world is again in turmoil.  Judge Impetuous demands new lawyer return her fee, and consign Great Aunt to the court's special "panel" of court-annointed attorneys.

The Investigator returns from vacation weeks later, and several weeks later submits his report, then several weeks later the attorney is appointed, and several weeks later the attorney asks me to introduce him to his new client.  OK, fine.  I again travel to San Mateo to introduce Great Aunt to an independent lawyer.  No mischief from caregiver this time.  But two months have passed and nothing but money has been spent.

In the meantime, Great Niece (who is a lawyer) arrives from Rome and the contours of a settlement are worked out with the private professional Trueheart and the Great Aunt. 

Great Nephew and I discuss disqualifying the judge, who has decided he and I have conspired to commit elder abuse against his Great Aunt by trying to get her a lawyer.  I file the motion, don't charge the client.

But wait!  Fiduciary Trueheart now decides she needs her own lawyer.  There aren't enough professionals on the payroll.  The whole process begins again, and tens of thousands of dollars in attorneys fees later, we end up exactly the same place we did at interim settlement.  Its the story of adding lawyers to cases.  Everybody's got a right to.  In bankruptcy and estate practice, everybody's got a right to spend someone else's money.

Scroll forward.  My client predeceases his Great Aunt.  Everybody petitions for their fees - Elmer, Fiduciary, fiduciary's lawyer, court-appointed lawyer and me.  Everybody else (but me) gets their fees approved by the Court.  My fees are determined to be "personal to" the now-deceased Great Nephew.  No fees for Peter. 

Elder law is tricky.  You can be mercenary.  There are ways to get paid.  Trueheart's lawyers filed a conservatorship petition, for example, and the successful filer can get their fees reimbursed.  I could attack everyone else's fee request, for example, and claim I create some benefit for the trust.  None of which I find very efficient (the conservatorship wasn't really necessary, since a trust existed), so I try to avoid it.  But this was one of those cases where you cannot do the right thing AND get paid at the same time.  If you practice elder law, get used to it.

Moral of the story:  when not in Rome, do not do what the Romans do. 

Serendipitous Justice

I had an interesting observation on Friday. I used to have a few financial advisors who referred me significant business - perhaps 5 to 6 clients per year each. They stopped referring after a few years because they found some guy who was "cheaper." (I am not sure what that means; its sort of like having your dog cut your hair because its cheaper than a barber.)

Friday I found out that the attorney to whom they are referring these clients is actually a licensed financial advisor. In other words, these financial advisors are actually referring their own clients - unknowingly - to one of their competitors!

I am grasping for the common analogy. Using your insolvent sibling's credit card only to find out later that you guaranteed the loan. Burning your Dad's clutch and then inheriting his car. Sending your kid to the inexpensive Kaiser psychiatrist who, unbeknownst to you, happens to also be your spouse's lover.

Serendipity often does justice better than any amount of intentionally directed ill-will. Karma, baby, karma.

The Ecuadorean Experience

I am just now wrapping up a visit to Ecuador, prompted by my daughter's idea, hatched this Spring, to spend a month in Spanish Immersion volunteering for an orphanage in Cuenca, Ecuador.  Having traveled alone to foreign lands of varied tongues in my own teen years, I wanted to witness the experience of her excitement.  Maybe it was motivated by paternal instinct; maybe it was motivated by some faint hope of reliving that wonder year in 1979.  Maybe both.

After saying our goodbyes a few hours after the above photo was taken (there are a lot of pictures of my extended arm in this batch), Ellen cabbing to the Panamerican Terminal for a 10-hour bus ride to Cuenca, I hired a driver to take me to Papagayo, about an hour south and towards the "Avenue of the Volcanoes" (a 200-mile stretch of active and inactive volcanoes in the Andes).  Amazingly, at the end of this 1 km bumpy dirt road, there was a lodge, complete with WiFi (although lacking in heat and sometimes hot water).  Spent the night there and headed to Cotopaxi the next day, the tallest active volcano in the world.

We hiked to the glacier (at 5020m, or 16,060 ft), had lunch, and took mountain bikes 14 km down the bumpy dirt road to the lake below. Note my riding companion, Jeremy (architect from San Francisco), had large fingers.

At the glacier.
At the bottom of the volcano.
Wild horses (escaped from ranches years ago and bred in the wild)

Next day, after another night in the lodge, our little group (now up to 20, from 8 the day before) went to Saquisili (a local Andean village) and then on to the Quilatoa volcano, the crater of which formed a lake.  We hiked down the inside of the crater (around 3800 m, perhaps 11,000 feet) to the lake (maybe 3300 m), took photos of some Alpacas, and rode mules back out of the crater.
The live animal market at Saquisili.  That large hog was available for the taking for US$180.  Prolly wouldn't fit in the overhead bin.
Hiking down the inside of the crater. 
At the bottom, getting some local help with my mule.
The Alpacas.

Extra! Extra! Getchar Guvvament Bailout Money Hee-ah

Have you gotten these emails from various spam-like sites advising you to make sure you get "your piece of the government bailout pie"?  If ever there were a reason to be suspicious of a government that promises it is "here to help," this appears to be it.  It is common knowledge that TARP funds, named to allegedly direct my bank to relieve itself of the "troubled assets" it purchased (in between buying companies, paying bonuses to executives, and spinning off commissions to the Birkenstock-clad mortgage broker), has not really gone to buy any such "troubled assets."  Because the first hastily-passed Act did not tell the banks what to do with this money, now we have to set up a "bad bank" to buy bad assets, and we have to pay for that - again. 

I Have Decided to Save the World Economy

I am going to bite the bullet for everyone here and save the world economy. Here's how (bear with me, because this requires some explanation).

The Sea Changes in Clients' Attitudes About Financial Advisors

Yesterday morning, Schwab released its fifth semi-annual survey of independent registered investment advisors.  More than 1200 independent advisors with more than $300 billion in assets under management completed the survey, which was conducted from Jan. 20-Jan. 30, 2009.  It reported a phenomenon that I have observed but only anecdotally:  there has been a sea change in how Americans view their financial advisors and seek financial advice. 

    This is my version of the "Sea Change"

What Will Happen to Financial Advisors and Wealth Managers Now?

I am empathizing with our financial advisor cousins today.

Bear Stearns was bought by JP Morgan in March.  Lehman was bought from bankruptcy by Barclay's.  WAMU is closed and sold to Chase (also JP Morgan).  Merrill Lynch was acquired by B of A.  Wachovia is cut up and being sold to Citi and Wells Fargo.  A chunk of Morgan Stanley was sold to Mitsubishi.  What the general public may not know is that all of these entities, without exception, have various wealth management groups, sometimes called "private client," "private banking," "private wealth management," "family office" and "private trust" groups, all of which perform more or less the same function - provide professional (sometimes expert) advice on what to do with large amounts (relatively) of capital held by individuals.  What is going to happen to this industry of advisors after all this consolidation?

Santa Cruz Beach Boardwalk

One of God's great blessings in my recent life is our 6 year-old son, conceived about a week after 9-11-01, around the day we brought our dog Rex from the pound, when we were least expecting (at age 41) to be expecting.  A love child in our 40's.  Tangible evidence that the Almighty has a sense of humor. 

Johann reminded me this Summer that there is nothing wrong with being completely covered in sand.  There are times when I feel like I'm under a mountain of it.  And whether that is a burden or a blessing is simply a matter of perspective. 

We did get a couple of trips to Santa Cruz this Summer - to the beach Boardwalk.  We even talked our 16 year-old daughter into joining us!  Of course, she "just had to" bring a friend (God forbid she be seen having fun with her parents). 

All Set Up - or All Screwed Up?

I attended my wife's company picnic on Sunday and, as often happens when people learn what I do, the conversation drifted to an estate issue.  Bob (not his real name) had "it all set up."  He was agent (under a power of attorney) over his 90+ year-old Aunt's modest middle-class estate: a home (owned outright), and two $100K CDs.  Easy enough.  Aunt needed some in-home care and one of the CDs (at Washington Mutual)was about the expire.  His issue (hint: not the issue):  whether to roll the CD from WAMU to Wells Fargo or another bank because of the problems he had been hearing about WAMU.  So how does one respond?

Fear and Loathing on Wall Street

If you, like me, are scratching your head over the last two months, I think we have a lot of company.  Some sort of economic untethering has occurred as our economy groans to deleverage itself.  The old school thinking was that interest rates, and federal manipulation of same through targets, discount rates and fed funds rates, could control the money supply.  But recent evidence suggests that, at least on a macroeconomic level, default risk (or the perception of such risk by the underwriter) can shut down the money supply like a spigot on a leaky garden hose.